Loan writedowns fell more than expected from a year earlier to 496 million euros. The bank also cut more costs in the first quarter than forecast.

UniCredit has embarked on a restructuring after hiring French banker Jean Pierre Mustier as chief executive in mid-2016. It raised 13 billion euros early last year in one of Europe’s biggest cash calls, to fund a balance sheet clean-up.

“First-quarter 2018 results are another tick in the box on the restructuring story — expect the stock to outperform today,” Jefferies analysts said in a note.

UniCredit said it expected its soured loans to total 37.9 billion euros at the end of 2019, which would be an improvement on a 40.3 billion euro target set in December. [nI6N1NR01V]

To meet regulatory demands, Italian banks have been shedding billions of euros in loans that had soured due to a deep recession.

The bank said its core capital stood at a solid 13.06 percent of assets after factoring in a new accounting rule requiring lenders to book expected losses, rather than just actual losses as previously.